August 16, 2012
CSR: Hard Questions for All Sides
Posted by Brett McDonnell

One thing I really like about the Will Wilkinson Economist post that Erik points us to in his introduction is that it poses hard questions for several different sides in the by now rather stale CSR debate.  For progressive CSR advocates like yours truly, the problem is obvious.  Normally, we think of CSR as trying to get corporations to do stuff that we like or stop doing stuff we don't like.  But the Chick-Fil-A position on same-sex marriage (or rather, it's CEO's position on same-sex marriage) is not at all something that we like.  The bank account of my partner and myself has taken a beating in recent months as we have given money to try to defeat the anti-marriage constitutional amendment on the ballot here in Minnesota.  And yet, taking stands on an important political and social issue sure does seem like the kind of thing CSR advocates encourage.  Indeed, my side of the marriage debate here is urging corporations to publicly oppose the amendment, and I personally cheer every time one does (you rock, General Mills).  So, what's sauce for the goose is sauce for the gander.

One of my favorite examples of this is one of the classic old CSR cases, Medical Committee for Human Rights v. SEC.  There, a lefty activist group put forth a shareholder proposal to Dow Chemical asking it to stop making napalm for use in war (this was during the height of the Vietnam War).  Where a CSR advocate should stand on this seems clear.  And yet, there is a suggestion in the case that Dow wasn't really profiting from napalm, but rather was producing it because the management felt that was its patriotic duty.  Who knows, maybe they did.  Do we want managers (or shareholders?) making those kinds of moral decisions?

And yet, if not them, who should be making those decisions?  Another position which I think Wilkinson's post implicitly challenges is Wilkinson's own libertarianism.  Wilkinson is generally dismissive of CSR in that post.  Yet, a libertarian for good reasons is skeptical about most governmental limits on corporate behavior, and does not want them to proliferate.  Now, if you are an Ayn Rand type of libertarian who just doesn't give a hoot about anyone else on principle, there's no problem--just let corporations go off and maximize profits as Milton Friedman suggested.  But if one believes there are real moral harms that corporations are causing but that government should not be solving, then CSR is a way of addressing those harms in a much less statist way.  CSR is thus a way of being libertarian without endorsing pure selfishness and evasion of all serious externalities.  Wilkinson (my sense of him is that he's a very smart, reasonable libertarian-ish writer; I don't read him enough, but he's worth checking out if you haven't already) should be more sympathetic than he is in the post.

And yet, the critique that Wilkinson makes of CSR has much force.  Carried far enough, it converts all sorts of everyday consumption decisions into a part of the culture wars.  How dreary.

And so what to do?  Joan sums up the legal situation well.  Basically, corporate boards and officers can do what they want without fear of legal consequence.  Shareholders can try to influence them through 14a-8 proposals or through decisions about what kinds of stock to buy or sell.  Consumers can try to influence them through their own buy/sell decisions, individually and sometimes in collective actions.  That is as it should be.  Individually, we each have to decide when our consciences are touched enough by a particular corporation's behavior, bad or good, to change our consumption or investment decisions.  Totally ignoring all moral problems surrounding any corporations one associates with denies one's place in the moral fabric of the world.  Continually harping on about all sorts of different corporate misdeeds will make you into someone wisely avoided at any social event.  Somewhere in between is a balance that will differ for everyone.

As for me and Chick-Fil-A, luckily I don't have to choose.  There are very few in Minnesota (none near me), and it's not the sort of place I'd go to anyway.  If it were more of an option for me, I'd have a problem.  I feel personally very strongly on the marriage issue (why I can't marry the man I have been with for 25 years while ex-Gopher basketball star Kris Humphries can marry Kim Kardashian is rather a puzzle).  But, the nexus between that issue and Chick-Fil-A is weak--it has nothing to do with the company's business, and the issue only arises because of some personal statements by the CEO.  Given all the notoriety at this point, though, if I did feel a real yearning for some fast food chicken, I'd probably head to Kentucky Fried Chicken.

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